As USA Overrides the Market...

Communist China recognizes its decisive role:

BEIJING - The Communist Party of China (CPC) has acknowledged the market's "decisive" role in allocating resources, according to a communique issued after its key session about reform.
China will deepen its economic reform to ensure that the market will play a "decisive" role in allocating resources, according to the communique after the Third Plenary Session of the 18th CPC Central Committee, which closed here Tuesday.
The market had been often defined as a "basic" role in allocating resources since the country decided to build a socialist market economy in 1992.
While following its basic economic system and improving it, the country will work to improve the modern market system, macro-regulatory system and an open economy, the document said.
To let the market decide the allocation of resources, the primary task is to build an open and unified market with orderly competition, according to the document.
Land in cities and the countryside, which can be used for construction, will be pooled in one market, it said.
Under a modern market system, businesses should be allowed to operate independently and compete fairly while consumers should be free to choose and spend. Also, merchandise can be traded freely and equally, the document said.
In the document, the CPC pledged to clear barriers in the market and improve the efficiency and fairness in the allocation of resources. It will also create fair, open and transparent market rules and improve the market price mechanism.

It is discouraging to see USA hobbles itself for bankers and crush innovation for no particular reason, as China plays by our rules and wins.  Sigh.

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Food Trade and Ethics

What do you do with a complicated mess?

Kevin sends in an article on trade in food in Africa:
In the jargon of the industry, Africa has been an “origination” business since colonial times, providing raw materials for overseas consumers: gold from South Africa, coffee from Ethiopia, crude oil from Nigeria, cocoa from Ivory Coast and copper from Zambia. This business model is still crucial to the big trading houses and exporting Africa’s commodities has funnelled millions of dollars into the hands of foreign tycoons.
While Africa has heretofore been a source, now it is a market.  An amazing thing, Africa importing food.

The complicated mess is the series of competing laws that so distort the markets in Africa.  Terrible things happen after such laws are enacted:
In the first year of the Famine, deaths from starvation were kept down due to the imports of Indian corn and survival of about half the original potato crop. Poor Irish survived the first year by selling off their livestock and pawning their meager possessions whenever necessary to buy food. Some borrowed money at high interest from petty money-lenders, known as gombeen men. They also fell behind on their rents.
Corns laws made Irish land valuable: English overlords could make good money having Irish work the land as tenants (since Catholics could not own land) and sell the produce in England at artificially high prices.  The Irish lived off of potatoes, and when that crop failed, well the rest is history.
And as these things go, more died of the disease that followed when immune systems were compromised than from starvation.

We have recently seen images of such starvation in Africa.  A critical part of trade is making sure we are not creating problems with our policies.  Because the pattern is always the same, we already know how we get from corn laws to starving family in a country with plenty of food.  Our job is to not do that.
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Alibaba IPO

I describe the alibaba website as a place where when you need a sip of good glean water, you are given a firehose of foul liquid.  If you are serious about business, stay away form alibaba. was once a part owner, and they got out.

But but but, Alibaba is a massively successful company.  Yes, Alibaba is the Sprint, Esurance, Google, Amazon, Ally bank, Twitter, facebook and everything else all rolled into one in China.     I have no doubt it is doing well in many areas, but it is known for trade leads.  What it is known for must be avoided.

Now, China politics, on the Alibaba IPO:

Shortly after the company's CEO Jonathan Lu blasted the Hong Kong authorities for their lack of knowledge about Internet enterprises, his boss, chairman Jack Ma, invited a group of Hong Kong reporters from various media to Alibaba's headquarters in scenic Hangzhou to make a personal plea.
This is not going to convince too many in Hong Kong. What Ma may have missed is that bending the rules for his company would almost certainly stir a controversy that the Hong Kong government can ill afford at this time.
There was talk about Alibaba bringing its IPO to New York, or, some reports suggested, London. ...  Alibaba is not rushing into the US largely because that market is noted for its tough disclosure requirements and a large contingent of litigation-happy shareholders and investors. Hong Kong is the Goldilock's choice for Alibaba except for a provision in the rules that require all shareholders to be treated equally.
Ma and his lieutenants may not fully appreciate the importance of consistency in a rule-of-law market environment so meticulously established by the Hong Kong government over the past several decades to attract long-term investment funds from overseas institutions.

With all that power and money, it seems Alibaba wants to launder it out of China.  It seems the Chinese officials are frowning on that, making the ever more desperate alibaba folks panic.  And good for Hong Kong to stick to its rules.

Hong Kong has the exact same set of rogues and knaves as anywhere else, the genius is none of them can aggregate enough power to work their evil on others.  With no ability to aggregate power, peace and prosperity reigns.

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